Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Apr. 05, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-41227 | ||
Entity Registrant Name | CISO GLOBAL, INC. | ||
Entity Central Index Key | 0001777319 | ||
Entity Tax Identification Number | 83-4210278 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 6900 E. Camelback Road | ||
Entity Address, Address Line Two | Suite 900 | ||
Entity Address, City or Town | Scottsdale | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85251 | ||
City Area Code | (480) | ||
Local Phone Number | 389-3444 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value | ||
Trading Symbol | CISO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 15,458,228 | ||
Entity Common Stock, Shares Outstanding | 12,232,379 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 178 | ||
Auditor Name | Semple, Marchal & Cooper, LLP | ||
Auditor Location | Phoenix, Arizona |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 1,062,442 | $ 1,833,163 |
Accounts receivable, net | 5,685,727 | 7,862,297 |
Inventory | 218,890 | 11,803 |
Prepaid cost of revenue | 2,592,828 | 2,634,667 |
Prepaid expenses and other current assets | 1,200,271 | 1,724,650 |
Contract assets | 197,656 | 332,215 |
Total Current Assets | 10,957,814 | 14,398,795 |
Property and equipment, net | 3,677,474 | 4,680,495 |
Right of use asset, net | 762,228 | 255,687 |
Intangible assets, net | 3,778,244 | 8,475,229 |
Goodwill | 31,519,844 | 76,664,017 |
Prepaid cost of revenue, net of current portion | 888,255 | |
Other assets | 71,523 | 22,592 |
Total Assets | 51,655,382 | 104,496,815 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 15,951,327 | 8,310,337 |
Deferred revenue | 4,158,969 | 4,472,140 |
Lease liability | 219,342 | 121,731 |
Loans payable | 3,691,464 | 7,758,831 |
Convertible notes payable | 2,050,000 | 2,550,000 |
Total Current Liabilities | 26,071,102 | 23,213,039 |
Long-term Liabilities: | ||
Deferred revenue, net of current portion | 1,099,734 | |
Loans payable, net of current portion | 2,748,788 | 4,243,802 |
Lease liability, net of current portion | 596,307 | 159,205 |
Deferred tax liability | 435,678 | |
Total Liabilities | 35,515,931 | 28,051,724 |
Commitments and Contingencies | ||
Stockholders’ Equity: | ||
Common stock, $.00001 par value; 300,000,000 shares authorized; 11,949,959 and 9,697,921 issued outstanding at December 31, 2023 and December 31, 2022, respectively | 119 | 97 |
Preferred stock, $.00001 par value; 50,000,000 shares authorized; 0 shares issued and outstanding on December 31, 2023 and December 31, 2022, respectively | ||
Additional paid-in capital | 172,837,842 | 153,170,351 |
Accumulated translation adjustment | 1,320,177 | 1,062,247 |
Accumulated deficit | (158,018,687) | (77,787,604) |
Total Stockholders’ Equity | 16,139,451 | 76,445,091 |
Total Liabilities and Stockholders’ Equity | 51,655,382 | 104,496,815 |
Related Party [Member] | ||
Long-term Liabilities: | ||
Convertible notes payable, related party | $ 5,000,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 11,949,959 | 9,697,921 |
Common stock, shares outstanding | 11,949,959 | 9,697,921 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue: | ||
Total revenue | $ 57,058,757 | $ 46,549,617 |
Cost of revenue: | ||
Total cost of revenue | 51,009,223 | 43,824,296 |
Total gross profit | 6,049,534 | 2,725,321 |
Operating expenses: | ||
Professional fees | 3,695,187 | 2,067,603 |
Advertising and marketing | 474,121 | 804,218 |
Selling, general and administrative | 26,744,543 | 23,106,451 |
Stock based compensation | 7,712,671 | 9,885,191 |
Impairment of goodwill | 45,194,717 | |
Total operating expenses | 83,821,239 | 35,863,463 |
Loss from operations | (77,771,705) | (33,138,142) |
Other income (expense): | ||
Other income (expense) | (13,640) | 43,332 |
Interest expense, net | (2,881,416) | (680,921) |
Total other income (expense) | (2,895,056) | (637,589) |
Loss before income taxes | (80,666,761) | (33,775,731) |
Benefit from income taxes | (435,678) | (549) |
Net loss | (80,231,083) | (33,775,182) |
Foreign currency translation adjustment | 257,930 | 1,062,247 |
Comprehensive loss | $ (79,973,153) | $ (32,712,935) |
Net loss per common share - basic | $ (7.22) | $ (3.64) |
Net loss per common share - diluted | $ (7.22) | $ (3.64) |
Weighted average shares outstanding - basic | 11,117,316 | 9,275,554 |
Weighted average shares outstanding - diluted | 11,117,316 | 9,275,554 |
Security managed services [Member] | ||
Revenue: | ||
Total revenue | $ 50,078,925 | $ 40,920,420 |
Cost of revenue: | ||
Total cost of revenue | 23,671,605 | 15,431,523 |
Professional Services [Member] | ||
Revenue: | ||
Total revenue | 6,979,832 | 5,629,197 |
Cost of revenue: | ||
Total cost of revenue | 900,582 | 844,287 |
Costof Payroll [Member] | ||
Cost of revenue: | ||
Total cost of revenue | 21,613,207 | 20,036,182 |
Stockbased Compensation [Member] | ||
Cost of revenue: | ||
Total cost of revenue | $ 4,823,829 | $ 7,512,304 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2021 | $ 83 | $ 69,310,544 | $ (44,012,422) | $ 25,298,205 | ||
Balance, shares at Dec. 31, 2021 | 8,328,397 | |||||
Stock based compensation - stock options | 15,464,587 | 15,464,587 | ||||
Stock based compensation - common stock | $ 1 | 2,266,233 | 2,266,234 | |||
Stock based compensation - common stock, share | 60,655 | |||||
Stock issued for cash | 1,167,289 | 1,167,289 | ||||
Stock issued for cash, shares | 23,499 | |||||
Exercise of options | $ 2 | 1,480,140 | $ 1,480,142 | |||
Exercise of options, shares | 179,268 | 179,268 | ||||
Stock issued for acquisition | $ 6 | 34,726,374 | $ 34,726,380 | |||
Stock issued for acquisition, shares | 548,600 | |||||
Foreign currency translation | 1,062,247 | 1,062,247 | ||||
Net loss | (33,775,182) | (33,775,182) | ||||
Stock issued for cash in public offering | $ 1 | 9,521,797 | 9,521,798 | |||
Stock issued for cash in public offering, shares | 137,334 | |||||
Stock issued for VelocIT acquisition | ||||||
Stock issued for VelocIT acquisition, shares | 17,112 | |||||
Stock issued for Red74 acquisition | ||||||
Stock issued for Red74 acquisition, shares | 2,267 | |||||
Stock issued for Creatrix acquisition | $ 1 | 3,629,999 | 3,630,000 | |||
Stock issued for Creatrix acquisition, shares | 40,000 | |||||
Stock issued for CyberViking acquisition | 1,836,320 | 1,836,320 | ||||
Stock issued for CyberViking acquisition, shares | 33,267 | |||||
Stock issued for CUATROi acquisition | $ 1 | 6,847,473 | 6,847,474 | |||
Stock issued for CUATROi acquisition, shares | 144,463 | |||||
Stock issued for NLT Secure acquisition | $ 2 | 6,919,595 | 6,919,597 | |||
Stock issued for NLT acquisition, shares | 183,059 | |||||
Balance at Dec. 31, 2022 | $ 97 | 153,170,351 | 1,062,247 | (77,787,604) | 76,445,091 | |
Balance, shares at Dec. 31, 2022 | 9,697,921 | |||||
Stock based compensation - stock options | 11,469,667 | 11,469,667 | ||||
Stock based compensation - common stock | $ 2 | 733,498 | 733,500 | |||
Stock based compensation - common stock, share | 233,333 | |||||
Stock issued for cash | $ 18 | 6,655,475 | 6,655,493 | |||
Stock issued for cash, shares | 1,782,658 | |||||
Exercise of options | $ 1 | 491,852 | $ 491,853 | |||
Exercise of options, shares | 69,378 | 69,378 | ||||
Stock issued for acquisition | 99,000 | $ 99,000 | ||||
Stock issued for acquisition, shares | 33,335 | |||||
Stock issued as lending discount | $ 1 | 217,999 | 218,000 | |||
Stock issued as lending discount , shares | 133,334 | |||||
Foreign currency translation | 257,930 | 257,930 | ||||
Net loss | (80,231,083) | (80,231,083) | ||||
Balance at Dec. 31, 2023 | $ 119 | $ 172,837,842 | $ 1,320,177 | $ (158,018,687) | $ 16,139,451 | |
Balance, shares at Dec. 31, 2023 | 11,949,959 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (80,231,083) | $ (33,775,182) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation - stock options | 11,469,667 | 15,464,587 |
Stock based compensation - common stock | 733,500 | 1,932,908 |
Depreciation and amortization | 3,144,047 | 3,071,917 |
Right of use amortization | 227,241 | 247,474 |
Other | 200,317 | 35,782 |
Impairment of intangible assets | 3,116,039 | |
Impairment of goodwill | 45,194,717 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 2,085,883 | (979,898) |
Inventory | (217,664) | 173,156 |
Contract assets | 134,559 | (166,908) |
Prepaids and other current assets | (493,328) | (2,625,108) |
Accounts payable and accrued expenses | 8,125,856 | 4,237,986 |
Lease liability | (199,069) | (206,870) |
Settlement liability | (470,000) | |
Deferred revenue | 789,206 | 2,379,149 |
Net cash used in operating activities | (5,920,112) | (10,681,007) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (213,629) | (512,247) |
Cash acquired/(paid) in acquisitions, net | 30,430 | (5,536,697) |
Proceeds from the sale of property and equipment | 23,041 | |
Net cash used in investing activities | (160,158) | (6,048,944) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 6,655,493 | 10,689,087 |
Proceeds from stock option exercise | 491,853 | 1,480,142 |
Proceeds from loan payable | 6,852,408 | 5,000,000 |
Proceeds from convertible notes payable, related party | 5,000,000 | |
Proceeds from convertible note payable | 2,050,000 | 1,000,000 |
Proceeds from line of credit | 264,723 | 86,585 |
Payment on line of credit | (261,591) | |
Payment on loans payable | (12,118,340) | (369,829) |
Payment on notes payable, related party | (2,083,076) | |
Payment of convertible note payable | (2,550,000) | |
Payment of debt issuance cost | (191,500) | (25,000) |
Net cash provided by financing activities | 6,193,046 | 15,777,909 |
Effect of exchange rates on cash and cash equivalents | (883,497) | 60,170 |
Net decrease in cash and cash equivalents | (770,721) | (891,872) |
Cash and cash equivalents - beginning of the period | 1,833,163 | 2,725,035 |
Cash and cash equivalents - end of the period | 1,062,442 | 1,833,163 |
Cash paid for: | ||
Interest | 2,376,477 | 512,374 |
Income taxes | ||
Supplemental disclosure of non-cash transactions: | ||
Operating lease assets obtained in exchange for operating lease obligations | 733,782 | 476,986 |
Common stock issued in True Digital acquisition | 34,726,380 | |
Common stock issued in Creatrix acquisition | 3,630,000 | |
Common stock issued in CyberViking acquisition | 1,836,320 | |
Common stock issued in CUATROi acquisition | 6,847,474 | |
Common stock issued as a lending discount | 218,000 | |
Veloc I T [Member] | ||
Supplemental disclosure of non-cash transactions: | ||
Common stock issued in acquisition | ||
R E D Seventy Four [Member] | ||
Supplemental disclosure of non-cash transactions: | ||
Common stock issued in acquisition | ||
N L T Secure [Member] | ||
Supplemental disclosure of non-cash transactions: | ||
Common stock issued in acquisition | 6,919,597 | |
SB Cyber [Member] | ||
Supplemental disclosure of non-cash transactions: | ||
Common stock issued in acquisition | $ 99,000 |
NATURE OF THE ORGANIZATION AND
NATURE OF THE ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF THE ORGANIZATION AND BUSINESS | NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS Unless otherwise indicated or the context requires otherwise, the terms ““we,” “us,” “our,” and “our company” refer to CISO Global, Inc., a Delaware corporation (“CISO Global”), and our wholly owned subsidiaries. All dollar amounts are expressed in United States dollars. Nature of the Business We are a cybersecurity and compliance company comprised of highly trained and seasoned security professionals who work with clients to enhance or create a better cyber posture in their organization. We provide a full range of cybersecurity consulting and related services, encompassing all three pillars of compliance, cybersecurity, and culture. Our services include secured managed services, compliance services, security operations center (“SOC”) services, virtual Chief Information Security Officer (“vCISO”) services, incident response, certified forensics, technical assessments, and cybersecurity training. We believe that culture is the foundation of every successful cybersecurity and compliance program. To deliver that outcome, we developed our unique offering of MCCP+ (“Managed Compliance & Cybersecurity Provider + Culture”), which is a holistic solution that provides all three of these pillars under one roof from a dedicated team of subject matter experts. In contrast to the majority of cybersecurity firms that are focused on a specific technology or service, we seek to differentiate ourselves by remaining technology agnostic, focusing on accumulating highly sought-after topic experts. We continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible service for our clients. We believe that bringing together a world-class team of technological experts with multi-faceted expertise in the critical aspects of cybersecurity is key to providing technology agnostic solutions to our clients in a business environment that has suffered from a chronic lack of highly skilled professionals, thereby setting us apart from competitors and in-house security teams. Our goal is to create a culture of security and to help quantify, define, and capture a return on investment from information technology and cybersecurity spending. |
LIQUIDITY AND GOING CONCERN CON
LIQUIDITY AND GOING CONCERN CONSIDERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND GOING CONCERN CONSIDERATIONS | NOTE 2 – LIQUIDITY AND GOING CONCERN CONSIDERATIONS The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business However, due to losses incurred, substantial doubt about the Company’s ability to continue as a going concern exists. We are evaluating strategies to obtain the required additional funding for future operations. These strategies may include, obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. However, we may be unable to access further equity or debt financing when needed. As such, there can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all. The ability for us to continue as a going concern is dependent upon our ability to successfully accomplish the plan described in the Growth Strategy paragraph and eventually attain profitable operations. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The summary of significant accounting policies presented below is designed to assist in understanding our consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of our management, who is responsible for their integrity and objectivity. Reverse Stock Split On February 29, 2024, our board of directors approved a 1-for-15 reverse stock one 0.00001 15 Consolidation The consolidated financial statements include the accounts of our company and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Prior Period Reclassifications Reclassification of certain immaterial prior period amounts have been made to conform to the current period presentation. Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. We believe the following critical accounting policies affect our more material judgments and estimates used in the preparation of the accompanying consolidated financial statements. Material estimates include the allowance for credit losses, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations, and assumptions used in the Black-Scholes-Merton pricing model, such as expected volatility, risk-free interest rate, share price, expected dividend rate, and the adequacy of insurance reserves. Revenue Our revenues are derived from two major types of services to clients: security managed services and professional services. With respect to Security Managed Services, we provide culture education and enablement, tools and technology provisioning, data and privacy monitoring, regulations and compliance monitoring, remote infrastructure administration, and cybersecurity services including, but not limited to, antivirus and patch management. With respect to Professional Services, we provide cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, and disaster recovery and data backup solutions. Our managed services offerings typically are paid in advance of providing services. We have determined that our contracts do not include a significant financing component. Payments received in advance of our performance are initially recorded as deferred revenue and then recognized as revenue on a straight-line basis over the term of the contract. Revenue is recognized net of allowances for applicable transaction-based taxes collected from customers. Our revenue is categorized and disaggregated as reflected in our consolidated statements of operations and comprehensive loss, as follows: Security Managed Services We have three distinct revenue streams under cybersecurity security managed services: risk and compliance, cyber defense operations, and secured managed services. We derive revenue from risk and compliance by ensuring our customers implement the right controls, properly prioritizing risks, and investing in the appropriate remediation, so our customers can achieve compliance, adhere to industry standards and guidelines, and manage continuous monitoring over time. We derive revenue from cyber defense operations through security focused end-to-end network and device management solutions for companies that want to outsource their administration needs to a team of senior engineers who provide modern strategy, insights, support, SOC-as-a-service, which is a subscription-based service that manages and monitors clients’ logs, devices, clouds, network, and assets for possible cyber threats. Secured managed services include road mapping the future state for the client and providing our knowledgeable expertise to help them achieve their security needs. Performance Obligations Our contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have determined the performance obligations for the following services: Risk and Compliance Cyber Defense Operations Secured Managed Services Professional Services We have two distinct revenue streams under professional services: incident response and digital forensics, and security testing and training. We derive revenue from security testing and training by utilizing the same tools and techniques a malicious cybercriminal would use to try to gain unauthorized access to highly guarded corporate systems and data to evaluate technical controls and quantify business risks in a meaningful way. We also offer cybersecurity awareness training required under most compliance frameworks, and recommended as a best practice under National Institute of Standards and Technology standards, to help reduce the risk of a successful cyber-attack. We derive revenue from the sale of hardware and software for customer’s IT infrastructure along with occasional staffing services. We derive revenue from incident response and digital forensics by providing our customers with certified experts experienced in locating and neutralizing threat actors who have breached their environments. Our team is able to identify and contain a cyberattack quickly, implement patches or configuration changes to prevent re-infection, perform forensic analysis to determine root cause, and provide a plan of attack for improvements that will prevent a similar attack from succeeding in the future. Performance Obligations Our contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have determined the performance obligations for the following services: Security Testing and Training Incident Response and Digital Forensics Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Accounts Receivable Accounts receivable are generally unsecured, non-interest bearing and reported at their outstanding unpaid principal balances, net of allowances for credit losses. We provide for allowances for credit losses based on our estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for credit losses when a balance is determined to be uncollectible. As of December 31, 2023 and 2022, our allowance for credit losses was $ 219,141 270,011 Prepaid cost of revenue Prepaid cost of revenue represents amounts charged by our vendors for licenses that we resell to our customers. These amounts are amortized to cost of revenue over the same period revenue is recognized for the related contract with our customers. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally between three five years Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. Impairment of Long-Lived Assets We review long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. During the year ended December 31, 2023, we recognized losses on impairment of goodwill and intangible assets of $ 45,194,717 3,116,039 Intangible Assets We record our intangible assets at estimated fair value in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other Goodwil Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually during the fourth quarter, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using a market approach. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. Failure to maintain a similar market value may cause a future impairment of goodwill at the reporting unit level. Advertising and Marketing Costs We expense advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 474,121 804,218 Fair Value Measurements As defined in ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. Fair Value of Financial Instruments The carrying value of cash, accounts receivable, accounts payable and accrued expenses, and other current liabilities approximate their fair values using Level 3 inputs, based on the short-term maturity of these instruments. The carrying amount of loans and notes payable approximate the estimated fair value for this financial instrument as management believes that such debt and interest payable on the notes approximates our incremental borrowing rate. The long-lived assets (i.e., goodwill and intangible assets) were valued utilizing Level 3 inputs. Significant unobservable inputs used in fair value measurement of the intangible assets include projected revenue, gross profit and operating expenses, income tax rates, discount rates, royalty rates, and attrition rates. Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. All outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the options and shares issuable upon conversion have been excluded from our computation of net loss per common share for the years ended December 31, 2023 and 2022. On March 8, 2024, we filed an amendment to our certificate of incorporation to effectuate a 1-for-15 The following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to our net loss position even though the exercise price could be less than the average market price of the common shares: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE December 31, 2023 December 31, 2022 Stock options 2,105,168 2,426,428 Warrants 49,614 9,614 Convertible debt 846,122 28,715 Total 3,000,904 2,464,757 Stock-Based Compensation We apply the provisions of ASC 718, Compensation – Stock Compensation For stock options issued to employees and members of our Board of Directors for their services, we estimate the grant date fair value of each option using the Black-Scholes-Merton option pricing model. The use of the Black-Scholes-Merton option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, we recognize stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred. Due to our company’s limited history and lack of public market for its common stock, we used the average of historical share prices of our common stock and that of similar companies within our industry to calculate volatility for use in the Black-Scholes-Merton option pricing model. We issued shares of our stock to vendors and nonemployee for services provided. We recognize the accounting grant date fair value of the stock award as compensation expense over the required service period of each award. Shares issued for services are measured based on the fair market value of the underlying common stock on their respective accounting grant dates. New shares are issued upon the exercise of stock options. Deferred Revenue Deferred revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided to our customers or annual licenses and is recognized as services are performed or ratably over the life of the license. We generally invoice customers in advance or in milestone-based installments. D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE December 31, 2023 December 31, 2022 Current: Security managed services $ 3,366,273 $ 3,609,087 Professional services 792,696 863,053 Total deferred revenue - current $ 4,158,969 $ 4,472,140 Long-term: Security managed services $ 1,099,734 $ - Total deferred revenue – long term $ 1,099,734 $ - The increase in the deferred revenue balance is primarily driven by payments received in advance of satisfying our performance obligations, offset by $ 4,120,260 SCHEDULE OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE 2024 2025 Total Security managed services $ 3,366,273 $ 1,099,734 $ 4,466,007 Professional services 792,696 - 792,696 Total deferred revenue $ 4,158,969 $ 1,099,734 $ 5,258,703 Foreign Currency Our functional and reporting currency is the U.S. dollar. For certain of our foreign subsidiaries whose functional currency is other than the U.S. dollar, we translate revenue and expense transactions at average exchange rates. We translate assets and liabilities at period-end exchange rates and include foreign currency translation gains and losses as a component of accumulated other comprehensive income. Leases Leases in which our company is the lessee are comprised of corporate offices and property and equipment. All of the leases are classified as operating leases. We lease multiple office spaces with a remaining weighted average term of 3.76 years. Right-of-use (“ROU”) assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that we will exercise that option. In accordance with ASC 842, Leases Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We utilize ASC 740, Income Taxes For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations when a determination is made that such expense is likely. Emerging Growth Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards. We expect to use the extended transition period for any new or revised accounting standards during the period which we remain an emerging growth company. Recently Issued Accounting Standards In October 2021, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with ASC Topic 606 as if the acquirer had originated the contracts. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this standard did not have a material impact on our consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. W e are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | NOTE 4 – ACQUISITIONS True Digital Security, Inc. Acquisition On January 5, 2022, we entered into the True Digital Stock Purchase Agreement with certain stockholders of True Digital and the True Digital Merger Agreement with True Digital and certain of its other stockholders. On January 19, 2022, the transactions contemplated by the True Digital Stock Purchase Agreement and the True Digital Merger Agreement were consummated, with True Digital becoming a wholly owned subsidiary of our company (the “True Digital Acquisition”). True Digital’s outstanding common stock was exchanged for $ 6,153,000 548,600 The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration $ 40,879,380 Tangible assets acquired: Cash 485,232 Accounts receivable 1,404,386 Contract assets 131,342 Prepaid expenses and other current assets 196,825 Property and equipment 906,006 Other assets 17,505 Total tangible assets 3,141,296 Intangible assets acquired: Tradename - trademarks 1,744,200 Intellectual property 1,137,000 Non-competes 124,900 Total intangible assets 3,006,100 Assumed liabilities: Accounts payable and accrued expenses 1,283,003 Deferred revenue 1,956,600 Line of credit 283,244 Loans payable 181,741 Loans payable - shareholder 543,581 Total assumed liabilities 4,248,169 Net assets acquired 1,899,227 Goodwill (a) $ 38,980,153 (a) Goodwill and intangibles are not deductible for tax purposes. Creatrix, Inc. Acquisition On June 1, 2022, we entered into a stock purchase agreement with the stockholders of Creatrix, pursuant to which Creatrix became our wholly owned subsidiary. We anticipate that this will expand our professional services offerings and capabilities. Creatrix offers recognized expertise in identity management as wells as systems integration and software engineering and specializes in biometrics, vetting, credentialing, and case management. The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 3,630,000 Tangible assets acquired: Cash 3,572 Accounts receivable 125,908 Contract assets 33,965 Prepaid expenses and other current assets 3,597 Total tangible assets 167,042 Assumed liabilities: Accounts payable and accrued expenses 48,001 Loans payable 56,687 Total assumed liabilities 104,688 Net assets acquired 62,354 Goodwill (a) $ 3,567,646 (a) Goodwill is not deductible for tax purposes. CyberViking, LLC Acquisition On July 1, 2022, we entered into a stock purchase agreement with the interest holders of CyberViking and its interest holders, pursuant to which we acquired all of the issued and outstanding units of CyberViking, with CyberViking becoming a wholly owned subsidiary of our company. We anticipate that this will expand our professional services offerings and capabilities. CyberViking specializes in application security services, incident response, and threat hunting as well as the creation and management of security operation centers. We did not acquire assets nor assume liabilities in our purchase of CyberViking, as a result the $ 1,836,320 CUATROi Acquisition On August 25, 2022, we entered into a stock purchase agreement with CUATROi and its partners, pursuant to which CUATROi became our wholly owned subsidiary. We anticipate that this will expand our professional services offerings and capabilities. CUATROi is a cloud, managed services provider and cybersecurity company with offices in South America. The aggregate purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill. The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 6,847,474 Tangible assets acquired: Cash 77,804 Accounts receivable 478,210 Prepaid expenses and other current assets 51,464 Property and equipment 434,816 Total tangible assets 1,042,294 Intangible assets acquired: Customer base 1,240,000 Total intangible assets 1,240,000 Assumed liabilities: Accounts payable and accrued expenses 242,830 Loans payable 850,199 Total assumed liabilities 1,093,029 Net assets acquired 1,189,265 Goodwill (a) $ 5,658,209 (a) Goodwill and intangibles are not deductible for tax purposes. NLT Secure Acquisition On September 1, 2022, we entered into a stock purchase agreement with NLT Secure and its interest holders, pursuant to which we acquired all of the issued and outstanding units of NLT Secure becoming a wholly owned subsidiary of our company. We anticipate that this will expand our professional services offerings and capabilities. NLT Secure provides a broad range of security solutions and managed services to organizations throughout South America. The aggregate purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimate fair values as of the acquisition date, with the excess recorded to goodwill. The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 6,919,597 Tangible assets acquired: Cash 48,858 Accounts receivable 66,972 Prepaid expenses and other current assets 154,300 Property and equipment 1,071,401 Total tangible assets 1,341,531 Assumed liabilities: Accounts payable and accrued expenses 791,228 Loans payable 1,778,591 Total assumed liabilities 2,569,819 Net liabilities assumed 1,228,288 Goodwill (a) $ 8,147,885 (a) Goodwill is not deductible for tax purposes. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS December 31, 2023 December 31, 2022 Prepaid expenses $ 253,953 $ 987,651 Prepaid taxes 886,920 572,645 Prepaid insurance 59,398 164,354 Total prepaid expenses and other current assets $ 1,200,271 $ 1,724,650 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2023 December 31, 2022 Computer equipment $ 1,277,609 $ 1,264,713 Building 1,715,929 1,776,040 Leasehold improvements 527,705 541,647 Vehicle - 28,229 Furniture and fixtures 128,904 151,142 Software 1,728,126 1,667,283 Property and equipment gross 5,378,273 5,429,054 Less: accumulated depreciation (1,700,799 ) (748,559 ) Property and equipment, net $ 3,677,474 $ 4,680,495 Total depreciation expense was $ 1,099,048 736,181 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 7 – INTANGIBLE ASSETS AND GOODWILL Goodwill During the year ended December 31, 2023, our share price reduction was determined to be an indicator of impairment under ASC 350 of our two reporting units, United States and Latin America. We performed ongoing assessments to consider whether events or circumstances had occurred that could more likely than not reduce the fair value of a reporting unit below its carrying value. The valuation limitation from our recent share price decline caused us to perform a goodwill impairment test as of December 31, 2023. Based on the results of this testing, for the year ended December 31, 2023, we recorded a pre-tax, non-cash impairment charge related to the United States reporting unit and Latin America reporting unit of $ 35,933,364 9,261,353 As part of our quantitative testing process for goodwill of the reporting units, we estimated fair values using a market approach. The following table summarizes the changes in goodwill during the years ended December 31, 2023 and 2022, respectively: SCHEDULE OF CHANGES IN GOODWILL Balance as of December 31, 2021 Goodwill $ 38,870,599 Accumulated impairment losses (22,078,064 ) 16,792,535 Goodwill acquired during year 58,190,213 Foreign currency translation adjustment 1,237,153 Other 444,116 Balance as of December 31, 2022 Goodwill $ 98,742,081 Accumulated impairment losses (22,078,064 ) 76,664,017 Foreign currency translation adjustment 50,544 Impairment losses (45,194,717 ) Balance as of December 31, 2023 Goodwill 98,792,625 Accumulated impairment losses (67,272,781 ) $ 31,519,844 Intangible Assets We performed an impairment test of our intangible assets based upon the conditions that precipitated the goodwill impairment test described above. Based on the results of this testing, we recorded a pre-tax, non-cash impairment charge totaling $ 3,116,039 Fair values used in testing for potential impairment of our intangible assets are calculated using a discounted cash flows method by applying estimated cash flows from our forecasted revenue and expenses of the business that utilize those assets. The assumed cash flows from this calculation are discounted at a rate based on a market participant discount rate. There is uncertainty surrounding the revenue and cost growth factors for these assets and a change in the long-term revenue and cost growth rate or increase in the discount rate assumption could increase the likelihood of a future impairment. Following the recognition of the impairment losses, the affected assets had an aggregate carrying value of $ 455,809 Intangible assets, net are summarized as follows: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames – trademarks $ 4,037,142 $ (2,329,498 ) $ 1,707,644 Customer base 1,145,378 (639,937 ) 505,441 Non-compete agreements 685,651 (630,595 ) 55,056 Intellectual property/technology 2,588,560 (1,078,457 ) 1,510,103 Intangible Asset $ 8,456,731 $ (4,678,487 ) $ 3,778,244 Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames – trademarks $ 4,744,409 $ (1,167,476 ) $ 3,576,933 Customer base 2,949,143 (449,565 ) 2,499,578 Non-compete agreements 796,583 (436,611 ) 359,972 Intellectual property/technology 2,659,391 (620,645 ) 2,038,746 Intangible Asset $ 11,149,526 $ (2,674,297 ) $ 8,475,229 Amortization expense of identifiable intangible assets was $ 2,044,999 2,338,273 2.70 Based on the balance of intangibles assets at December 31, 2023, expected future amortization expense is as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2024 $ 1,808,849 2025 983,019 2026 772,645 2027 115,331 2028 49,200 Thereafter 49,200 Future Amortization Expense $ 3,778,244 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following amounts: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES December 31, 2023 December 31, 2022 Accounts payable $ 11,045,657 $ 5,267,492 Accrued payroll and bonuses 1,873,848 1,274,919 Accrued expenses 1,650,624 740,231 Accrued commissions 100,000 305,768 Indirect taxes payable 793,347 556,151 Accrued interest 487,851 165,776 Total accounts payable and accrued expenses $ 15,951,327 $ 8,310,337 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 9 - RELATED PARTY TRANSACTIONS Independent Consulting Agreement with Stephen Scott In August 2020, we entered into an Independent Consulting Agreement with Stephen Scott, a then director of our company, with respect to advisory and consulting services relating to our strategic and business development, and sales and marketing. Mr. Scott receives a consulting fee of $ 11,500 In July 2023, we entered into an Independent Consulting Agreement with Mr. Scott, to provide, on a non-exclusive basis, advisory and consulting services relating to our strategic and business development, intellectual property development, banking relationships, and strategic M&A for a period of one year. Mr. Scott will receive a consulting fee of $ 15,000 159,000 138,000 Convertible Note Payable – Related Party In March 2023, we issued an unsecured convertible note to Hensley & Company in the principal amount of $ 5,000,000 10.00 March 20, 2025 18.00 1.20 388,888 388,888 Managed Services Agreement with Hensley Beverage Company – Related Party In July 2021, we entered into a 1-year Managed Services Agreement with Hensley Beverage Company, an entity affiliated with Mr. McCain, a director of our company, to provide secured managed services. We also may be engaged by Hensley Beverage Company from time to time to provide other related services outside the scope of the Managed Services Agreement. While the agreement provides for a term through December 31, 2021, the agreement will continue until terminated by either party. For the years ended December 31, 2023 and 2022, we received $ 1,417,398 850,445 152,213 15,737 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | Note 10 - STOCKHOLDERS’ EQUITY Our amended and restated certificate of incorporation authorized the issuance of up to 300,000,000 50,000,000 0.00001 Equity Transactions During the years ended December 31, 2023 and 2022, we issued an aggregate of 1,782,658 160,833 26,739,853 2,412,474 6,682,198 10,689,087 During the years ended December 31, 2023 and 2022, we issued an aggregate of 366,667 and 60,655 shares of common stock ( 5,500,000 909,819 In January 18, 2022, we issued a warrant to the underwriter of our Form S-1 to purchase an aggregate 9,614 144,200 5 75.00 5.00 On May 19, 2023, we completed a $ 4,000,000 1,333,334 20,000,000 40,000 600,000 3.75 0.25 2,000,000 May 16, 2028 The follow table summarizes warrant activity: SCHEDULE OF STOCK WARRANT ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 - $ - - $ - Granted 9,614 75.00 - - Exercised - - - - Expired or cancelled - - - - Outstanding at December 31, 2022 9,614 $ 75.00 4.01 $ - Exercisable at December 31, 2022 9,614 $ 75.00 4.01 $ - Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2023 9,614 $ 75.00 4.01 $ - Granted 40,000 3.75 5.00 - Exercised - - - - Expired or cancelled - - - - Outstanding at December 31, 2023 49,614 $ 17.56 4.12 $ - Exercisable at December 31, 2023 49,614 $ 17.56 4.12 $ - |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
Compensation Related Costs [Abstract] | |
STOCK-BASED COMPENSATION | Note 11 – STOCK-BASED COMPENSATION 2023 Equity Incentive Plan Our 2023 Equity Incentive Plan (the “2023 Plan”), which replaces our 2019 Equity Incentive Plan (the “2019 Plan”), became effective on September 13, 2023. The total number of shares of our common stock reserved and available for delivery under the 2023 Plan at any time during the term of the 2023 Plan will be 2,666,667 40,000,000 1,455,983 21,839,752 4,122,650 61,839,752 Options We granted options for the purchase of 326,512 1,049,489 4,900,833 17,457,613 In applying the Black-Scholes option pricing model to stock options granted, we used the following assumptions: SCHEDULE OF BLACK-SCHOLES STOCK OPTIONS GRANTED For the Year Ended For the Year Ended December 31, 2023 December 31, 2022 Risk free interest rate 3.46 4.79 % 1.43 4.22 % Contractual term (years) 5.00 10.00 5.00 10.00 Expected volatility 94.58 136.47 % 87.11 90.90 % Expected dividend yield - % - % The follow table summarizes stock option activity: SCHEDULE OF STOCK OPTION ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 2,205,824 $ 27.60 - $ - Granted 1,049,489 52.65 - - Exercised (179,268 ) 8.25 - - Expired or cancelled (649,617 ) 45.45 - - Outstanding at December 31, 2022 2,426,428 36.73 - - Granted 326,512 6.15 - - Exercised (69,378 ) 7.18 - - Expired or cancelled (578,394 ) 41.56 - - Outstanding at December 31, 2023 2,105,168 $ 31.63 4.40 $ 1,542 Exercisable at December 31, 2023 1,514,541 $ 28.53 3.18 $ - The aggregate intrinsic value for stock options outstanding and exercisable is defined as the positive difference between the fair market value of our common stock and the exercise price of the stock options. Total compensation expense related to the options was $ 11,469,667 15,464,587 16,337,762 1.85 2.57 38.82 887,595 7,164,856 During the year-ended December 31, 2023, 317,929 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES Legal Claims From time-to-time, we are a party to litigation and subject to claims, suits, regulatory and government investigation, other proceedings and consent decrees in the ordinary course of business. We investigate claims as they arise and accrue estimates for resolutions of legal and other contingencies when losses are probable and reasonably estimable. There are no material pending legal proceedings in which we or any of our subsidiaries is a party or in which any of our directors, officers or affiliates, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us Indirect Taxes We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the United States and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the business of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generated based on regulations currently being applied to similar, but not directly comparable industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists, and believe we maintain adequate indirect tax accruals. As of December 31, 2023 and 2022, our accrual for estimated indirect tax liabilities was $ 793,347 409,187 Warranties Our services are generally warranted to deliver and operate in a manner consistent with general industry standards that are reasonably applicable and materially conform with our documentation under normal use and circumstances. We offer a limited warranty to certain customers, subject to certain conditions, to cover certain costs incurred by the customer in case of a security breach. We have entered into an insurance policy to cover our potential liability arising from this limited warranty arrangement. We have not incurred any material costs related to such obligations and have not accrued any liabilities related to such obligations in the consolidated financial statements as of December 31, 2023 and 2022. In addition, we also indemnify certain of our directors and executive officers against certain liabilities that may arise while they are serving in good faith in their company capacities. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid. |
LOANS PAYABLE, CONVERTIBLE NOTE
LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT | NOTE 13 – LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT Loans Payable Loans payable was as follows: SCHEDULE OF LOAN PAYABLE Effective Interest Rate Maturities December 31, 2023 December 31, 2022 Term loans (US dollar denominated) 4.00 71.55 % 2023 2027 $ 1,899,035 $ 5,461,520 Term loans (Chilean peso denominated) 3.48 19.20 % 2023 2031 4,541,217 6,541,113 6,440,252 12,002,633 Less current portion (3,691,464 ) (7,758,831 ) Long term loans payable $ 2,748,788 $ 4,243,802 Bridge Loan We entered into a bridge loan with Bell Bank (the “Bell Bank Note”), secured by substantially all of our assets, in the principal amount of $ 5,000,000 4.00 December 14, 2022 4.00 7.50 116,667 114,167 zero 4,167 Term Loans Various subsidiaries in the United States are borrowers under certain term loans. These term loans require monthly principal and interest payments. The term loans are secured by various assets owned by our subsidiaries. We recorded aggregate interest expense of these term loans of $ 20,605 50,754 zero 13,435 8.61 Our Latin America subsidiaries are the borrowers under certain term loans denominated in Chilean Pesos. These term loans require monthly principal and interest payments. The loans are secured by various assets owned by our subsidiaries. We recorded aggregate interest expense on these term loans of $ 617,804 318,055 11.15 In March 2023, we entered into a cash advance agreement, pursuant to which we received gross proceeds of $ 2,000,000 87,500 99,398 2,870,000 978,833 In August 2023, we entered into a second cash advance agreement, pursuant to which we received gross proceeds of $ 2,000,000 50,000 80,588 2,740,000 468,707 In November 2023, we entered into a business loan and security agreement, pursuant to which we obtained a loan with a principal amount of $ 2,200,000 44,000 53.44 53,731 594,000 200,881 In connection with the business loan, we entered into a fee agreement pursuant to which we issued 133,334 2,000,000 Convertible Notes Payable In October 2021, we issued to Neil Stinchcombe, a convertible note in the principal amount of $ 1,500,000 5.00 January 27, 2022 75.00 5.00 October 27, 2022 500,000 5.00 16,970 106,507 In June 2022, we issued an unsecured convertible note payable in the principal amount of $ 1,000,000 5.00 117.45 7.83 The outstanding principal of this note can be redeemed at any time by us or at maturity at 105% 1,050,000 22,101 79,167 In June 2023, we issued an unsecured convertible note in the principal amount of $ 1,050,000 10.00 June 7, 2024 4.20 61,954 61,954 In March 2023, we issued an unsecured convertible note to Hensley & Company in the principal amount of $ 5,000,000 10.00 March 20, 2025 18.00 1.20 388,888 388,888 In October 2023, we issued an unsecured convertible note in the principal amount of $ 1,000,000 12.00 October 12, 2024 1.7595 0.1173 26,983 26,983 Future minimum payments under the above debt instruments following the year ended December 31, 2023, are as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT 2024 $ 5,867,234 2025 6,522,165 2026 535,515 2027 293,634 2028 246,145 Thereafter 344,110 Total future minimum payments 13,808,803 Less: discount (318,551 ) Total 13,490,252 Less: current (5,741,464 ) Long term debt, net $ 7,748,788 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
LEASES | NOTE 14 – LEASES During the years ended December 31, 2023 and 2022, we recognized additional ROU assets and lease liabilities of $ 733,782 476,986 When measuring lease liabilities for leases that were classified as operating leases, we discounted lease payments using its estimated incremental borrowing rate. The weighted average incremental borrowing rate applied was 9.99 3.76 The following table presents net lease cost and other supplemental lease information: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Year Ended Year Ended Lease cost Operating lease cost (cost resulting from lease payments) $ 270,638 $ 259,033 Short term lease cost 156,828 66,658 Net lease cost $ 427,466 $ 325,691 Operating lease – operating cash flows (fixed payments) $ 270,638 $ 259,003 Operating lease – operating cash flows (liability reduction) $ 199,069 $ 233,425 Non-current leases – right of use assets $ 762,228 $ 255,687 Current liabilities – operating lease liabilities $ 219,342 $ 121,731 Non-current liabilities – operating lease liabilities $ 596,307 $ 159,205 Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the year ended December 31, 2023, are as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES Fiscal Year Operating Leases 2024 $ 293,689 2025 252,040 2026 198,690 2027 204,644 2028 53,816 Total future minimum lease payments 1,002,879 Amount representing interest (187,230 ) Present value of net future minimum lease payments $ 815,649 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 15 – INCOME TAXES For the years ended December 31, 2023, and 2022, the income tax benefit consisted of the following: SCHEDULE OF INCOME TAX BENEFIT 2023 2022 Year Ended December 31, 2023 2022 Current: Federal $ - $ - Foreign - 1,432 State - 6,869 Total current income taxes $ - $ 8,301 Deferred Federal $ - $ (95,018 ) Foreign (435,678 ) 100,466 State - (14,298 ) Total deferred income taxes $ (435,678 ) $ (8,850 ) Total $ (435,678 ) $ (549 ) A reconciliation of the statutory federal income tax benefit to actual tax benefit for the years ended December 31, 2023 and 2022 is as follows: SCHEDULE OF STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT Year Ended December 31, 2023 2022 Computed tax benefit at statutory rate 21.00 % 21.00 % Stock-based compensation (3.28 )% (5.10 )% Change in valuation allowance (10.77 )% (9.12 )% Return to provision adjustments (6.81 )% (6.39 )% Other, net (0.14 )% (0.39 )% Effective tax rate 0.00 % 0.00 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows as of December 31, 2023 and 2022: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 Year Ended December 31, 2023 2022 Deferred tax assets: Property and equipment $ 213,643 $ 69,252 Allowance for doubtful accounts 53,700 143,804 Net operating loss carryforwards 9,696,873 1,452,734 Stock-based compensation 9,841,300 4,303,860 Accounts payable and accrued liabilities 307,842 3,191 Goodwill impairment 12,298,349 - Other 19,770 208,043 Total deferred tax assets $ 32,431,477 $ 6,180,884 Valuation allowance (31,988,729 ) (4,381,644 ) Net deferred income taxes $ 442,748 $ 1,799,240 Deferred tax liabilities Intangible assets $ (326,448 ) $ (2,041,418 ) Prepaid expenses (116,300 ) (193,500 ) Total deferred tax liabilities (442,748 ) (2,234,918 ) Net deferred tax liabilities $ - $ (435,678 ) Net deferred tax liability by jurisdiction Domestic $ - $ - Chile - (435,678 ) Peru - - Colombia - - Total $ - $ (435,678 ) We account for deferred taxes under ASC 740, Income Taxes, which requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the ASC 740 more-likely-than-not realization threshold criterion. This assessment considers matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, legislative developments, and results of recent operations. The evaluation of the recoverability of the deferred tax assets requires that we weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. We have provided a valuation allowance for our net deferred tax assets at December 31, 2023 and 2022, due to the uncertainty surrounding the future realization of such assets and the cumulative losses we have generated. Therefore, no benefit has been recognized in the financial statements for the net operating loss carryforwards and other deferred tax assets. During the years ended December 31, 2023 and 2022, respectively, the valuation allowance increased by $ 27,607,085 4,555,842 As of December 31, 2023, we had approximately $ 34,870,734 39,385,617 3,579,475 Utilization of net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (IRC), and similar state provisions. We have not performed a detailed analysis to determine whether an ownership change under Section 382 of the IRC has occurred or will occur. We will perform an analysis as soon as is practicable to determine the extent of limitations, especially in regard to our subsidiaries. It is possible that additional limitations may arise in future years, even after an analysis is completed, due to future changes in the ownership of our Company. We file federal and state income tax returns in jurisdictions with varying statutes of limitations. With few exceptions, we are no longer subject to federal or state income tax examinations by tax authorities for tax years prior to 2022 and 2021, respectively. We believe our income tax filing positions and deductions are more likely than not to be sustained on audit. Therefore, no liabilities for uncertain tax positions have been recorded. As of the date of this filing, we have not filed our 2023 federal and state income tax returns. We expect to file these documents as soon as practicable. |
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
DEFINED CONTRIBUTION PLAN | NOTE 16 – DEFINED CONTRIBUTION PLAN On January 1, 2023, we began sponsoring a defined contribution 401(k) plans covering eligible U.S. employees, who may contribute up to 80% 637,365 |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | NOTE 17 – CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS Cash Deposits Our financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents. Although we deposit cash with multiple banks, these deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. These deposits may generally be redeemed upon demand and bear minimal risk. Revenue No single customer represented over 10 |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC INFORMATION | NOTE 18 – GEOGRAPHIC INFORMATION Revenue by geography is based on the customer’s billing address and was as follows: SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS 2023 2022 U.S. $ 33,953,744 $ 36,559,841 Chile 22,570,883 9,634,082 All other countries 534,130 355,694 Revenue $ 57,058,757 $ 46,549,617 No other international country represented more than 10% of revenue in any period presented. Property and equipment, net by geography was as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS 2023 2022 U.S. $ 1,052,637 $ 1,198,057 Chile 2,623,881 3,480,911 All other countries 956 1,527 Property and equipment net $ 3,677,474 $ 4,680,495 No other international country represented more than 10% of property and equipment, net in any period presented. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 19 – ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents AOCI activity in equity: SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME Foreign Currency Translation Adjustments Total AOCI Balance as of December 31, 2021 $ - $ - Other comprehensive income 1,062,247 1,062,247 Amounts reclassified from AOCI - - Balance as of December 31, 2022 1,062,247 1,062,247 Other comprehensive income 257,930 257,930 Amounts reclassified from AOCI - - Balance as of December 31, 2023 $ 1,320,177 $ 1,320,177 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS On January 31, 2024, we entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Aion Financial Technologies, Inc. (“Aion”), pursuant to which we may borrow up to $ 3,500,000 19.25 35,000 29.25 In connection with the Loan and Security Agreement, Aion opened a bank account in our name to be used for general business purposes including receipt of customer payments, disbursements paying normal business expenses, and receipt of any advances from Aion under this agreement. We will use proceeds from the Loan and Security Agreement to repay our business loan entered into November 2023 and for general corporate purposes, which may include working capital, capital expenditures, and repayment of debt. On February 29, 2024, our board of directors approved a 1-for-15 reverse stock split 0.00001 On March 22, 2024, we received notification from the Nasdaq Stock Market that we had sufficiently demonstrated compliance with the bid price requirement in Nasdaq Listing Rule 5550(a)(2) by maintaining a share price in excess of $ 1.00 On March 28, 2024, we and our US subsidiaries entered into a Business Loan and Security Agreement (the “Loan Agreement” with LendSpark Corporation (the “Lender”), pursuant to which we obtained a loan with a principal amount of $ 2,200,000 44,000 51.73% 53,308 572,000 If the Loan is prepaid in full prior to the 60-day anniversary of the date of the Loan Agreement, the total interest is reduced as follows: (i) if the Loan is repaid within 30 days, the total amount of interest due will be $242,000, and (ii) if the Loan is repaid within 60 days, the total amount of interest due will be $286,000. Pursuant to the Loan Agreement, we granted the Lender a security interest in all if our assets and the assets of our US subsidiaries (the “Collateral”) that is secondary to the security interest held by Aion. Upon the occurrence of an event of default, the Lender may, among other things, accelerate the Loan and declare all obligations immediate due and payable or take possession of the Collateral. In connection with Loan, we entered into a Fee Agreement (the “Fee Agreement”) with the Lender pursuant to which we issued 100,000 0.00001 Pursuant to the Fee Agreement, if we repay the Loan in full by (i) May 1, 2024, the Lender will return 75% of the Shares to us, and (ii) June 1, 2024, the Lender will return 50% of the Shares to us. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The summary of significant accounting policies presented below is designed to assist in understanding our consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of our management, who is responsible for their integrity and objectivity. |
Reverse Stock Split | Reverse Stock Split On February 29, 2024, our board of directors approved a 1-for-15 reverse stock one 0.00001 15 |
Consolidation | Consolidation The consolidated financial statements include the accounts of our company and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Prior Period Reclassifications | Prior Period Reclassifications Reclassification of certain immaterial prior period amounts have been made to conform to the current period presentation. |
Use of Estimates | Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. We believe the following critical accounting policies affect our more material judgments and estimates used in the preparation of the accompanying consolidated financial statements. Material estimates include the allowance for credit losses, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations, and assumptions used in the Black-Scholes-Merton pricing model, such as expected volatility, risk-free interest rate, share price, expected dividend rate, and the adequacy of insurance reserves. |
Revenue | Revenue Our revenues are derived from two major types of services to clients: security managed services and professional services. With respect to Security Managed Services, we provide culture education and enablement, tools and technology provisioning, data and privacy monitoring, regulations and compliance monitoring, remote infrastructure administration, and cybersecurity services including, but not limited to, antivirus and patch management. With respect to Professional Services, we provide cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, and disaster recovery and data backup solutions. Our managed services offerings typically are paid in advance of providing services. We have determined that our contracts do not include a significant financing component. Payments received in advance of our performance are initially recorded as deferred revenue and then recognized as revenue on a straight-line basis over the term of the contract. Revenue is recognized net of allowances for applicable transaction-based taxes collected from customers. Our revenue is categorized and disaggregated as reflected in our consolidated statements of operations and comprehensive loss, as follows: Security Managed Services We have three distinct revenue streams under cybersecurity security managed services: risk and compliance, cyber defense operations, and secured managed services. We derive revenue from risk and compliance by ensuring our customers implement the right controls, properly prioritizing risks, and investing in the appropriate remediation, so our customers can achieve compliance, adhere to industry standards and guidelines, and manage continuous monitoring over time. We derive revenue from cyber defense operations through security focused end-to-end network and device management solutions for companies that want to outsource their administration needs to a team of senior engineers who provide modern strategy, insights, support, SOC-as-a-service, which is a subscription-based service that manages and monitors clients’ logs, devices, clouds, network, and assets for possible cyber threats. Secured managed services include road mapping the future state for the client and providing our knowledgeable expertise to help them achieve their security needs. Performance Obligations Our contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have determined the performance obligations for the following services: Risk and Compliance Cyber Defense Operations Secured Managed Services Professional Services We have two distinct revenue streams under professional services: incident response and digital forensics, and security testing and training. We derive revenue from security testing and training by utilizing the same tools and techniques a malicious cybercriminal would use to try to gain unauthorized access to highly guarded corporate systems and data to evaluate technical controls and quantify business risks in a meaningful way. We also offer cybersecurity awareness training required under most compliance frameworks, and recommended as a best practice under National Institute of Standards and Technology standards, to help reduce the risk of a successful cyber-attack. We derive revenue from the sale of hardware and software for customer’s IT infrastructure along with occasional staffing services. We derive revenue from incident response and digital forensics by providing our customers with certified experts experienced in locating and neutralizing threat actors who have breached their environments. Our team is able to identify and contain a cyberattack quickly, implement patches or configuration changes to prevent re-infection, perform forensic analysis to determine root cause, and provide a plan of attack for improvements that will prevent a similar attack from succeeding in the future. Performance Obligations Our contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have determined the performance obligations for the following services: Security Testing and Training Incident Response and Digital Forensics |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are generally unsecured, non-interest bearing and reported at their outstanding unpaid principal balances, net of allowances for credit losses. We provide for allowances for credit losses based on our estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for credit losses when a balance is determined to be uncollectible. As of December 31, 2023 and 2022, our allowance for credit losses was $ 219,141 270,011 |
Prepaid cost of revenue | Prepaid cost of revenue Prepaid cost of revenue represents amounts charged by our vendors for licenses that we resell to our customers. These amounts are amortized to cost of revenue over the same period revenue is recognized for the related contract with our customers. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally between three five years Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. During the year ended December 31, 2023, we recognized losses on impairment of goodwill and intangible assets of $ 45,194,717 3,116,039 |
Intangible Assets | Intangible Assets We record our intangible assets at estimated fair value in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other |
Goodwil | Goodwil Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually during the fourth quarter, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using a market approach. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. Failure to maintain a similar market value may cause a future impairment of goodwill at the reporting unit level. |
Advertising and Marketing Costs | Advertising and Marketing Costs We expense advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 474,121 804,218 |
Fair Value Measurements | Fair Value Measurements As defined in ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash, accounts receivable, accounts payable and accrued expenses, and other current liabilities approximate their fair values using Level 3 inputs, based on the short-term maturity of these instruments. The carrying amount of loans and notes payable approximate the estimated fair value for this financial instrument as management believes that such debt and interest payable on the notes approximates our incremental borrowing rate. The long-lived assets (i.e., goodwill and intangible assets) were valued utilizing Level 3 inputs. Significant unobservable inputs used in fair value measurement of the intangible assets include projected revenue, gross profit and operating expenses, income tax rates, discount rates, royalty rates, and attrition rates. |
Net Loss per Common Share | Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. All outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the options and shares issuable upon conversion have been excluded from our computation of net loss per common share for the years ended December 31, 2023 and 2022. On March 8, 2024, we filed an amendment to our certificate of incorporation to effectuate a 1-for-15 The following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to our net loss position even though the exercise price could be less than the average market price of the common shares: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE December 31, 2023 December 31, 2022 Stock options 2,105,168 2,426,428 Warrants 49,614 9,614 Convertible debt 846,122 28,715 Total 3,000,904 2,464,757 |
Stock-Based Compensation | Stock-Based Compensation We apply the provisions of ASC 718, Compensation – Stock Compensation For stock options issued to employees and members of our Board of Directors for their services, we estimate the grant date fair value of each option using the Black-Scholes-Merton option pricing model. The use of the Black-Scholes-Merton option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, we recognize stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred. Due to our company’s limited history and lack of public market for its common stock, we used the average of historical share prices of our common stock and that of similar companies within our industry to calculate volatility for use in the Black-Scholes-Merton option pricing model. We issued shares of our stock to vendors and nonemployee for services provided. We recognize the accounting grant date fair value of the stock award as compensation expense over the required service period of each award. Shares issued for services are measured based on the fair market value of the underlying common stock on their respective accounting grant dates. New shares are issued upon the exercise of stock options. |
Deferred Revenue | Deferred Revenue Deferred revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided to our customers or annual licenses and is recognized as services are performed or ratably over the life of the license. We generally invoice customers in advance or in milestone-based installments. D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE December 31, 2023 December 31, 2022 Current: Security managed services $ 3,366,273 $ 3,609,087 Professional services 792,696 863,053 Total deferred revenue - current $ 4,158,969 $ 4,472,140 Long-term: Security managed services $ 1,099,734 $ - Total deferred revenue – long term $ 1,099,734 $ - The increase in the deferred revenue balance is primarily driven by payments received in advance of satisfying our performance obligations, offset by $ 4,120,260 SCHEDULE OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE 2024 2025 Total Security managed services $ 3,366,273 $ 1,099,734 $ 4,466,007 Professional services 792,696 - 792,696 Total deferred revenue $ 4,158,969 $ 1,099,734 $ 5,258,703 |
Foreign Currency | Foreign Currency Our functional and reporting currency is the U.S. dollar. For certain of our foreign subsidiaries whose functional currency is other than the U.S. dollar, we translate revenue and expense transactions at average exchange rates. We translate assets and liabilities at period-end exchange rates and include foreign currency translation gains and losses as a component of accumulated other comprehensive income. |
Leases | Leases Leases in which our company is the lessee are comprised of corporate offices and property and equipment. All of the leases are classified as operating leases. We lease multiple office spaces with a remaining weighted average term of 3.76 years. Right-of-use (“ROU”) assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that we will exercise that option. In accordance with ASC 842, Leases |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We utilize ASC 740, Income Taxes For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations when a determination is made that such expense is likely. |
Emerging Growth Company Status | Emerging Growth Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards. We expect to use the extended transition period for any new or revised accounting standards during the period which we remain an emerging growth company. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In October 2021, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with ASC Topic 606 as if the acquirer had originated the contracts. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this standard did not have a material impact on our consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. W e are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE | On March 8, 2024, we filed an amendment to our certificate of incorporation to effectuate a 1-for-15 The following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to our net loss position even though the exercise price could be less than the average market price of the common shares: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE December 31, 2023 December 31, 2022 Stock options 2,105,168 2,426,428 Warrants 49,614 9,614 Convertible debt 846,122 28,715 Total 3,000,904 2,464,757 |
SCHEDULE OF DEFERRED REVENUE | D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE December 31, 2023 December 31, 2022 Current: Security managed services $ 3,366,273 $ 3,609,087 Professional services 792,696 863,053 Total deferred revenue - current $ 4,158,969 $ 4,472,140 Long-term: Security managed services $ 1,099,734 $ - Total deferred revenue – long term $ 1,099,734 $ - |
SCHEDULE OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE | SCHEDULE OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE 2024 2025 Total Security managed services $ 3,366,273 $ 1,099,734 $ 4,466,007 Professional services 792,696 - 792,696 Total deferred revenue $ 4,158,969 $ 1,099,734 $ 5,258,703 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
True Digital Security, Inc. Acquisition [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration $ 40,879,380 Tangible assets acquired: Cash 485,232 Accounts receivable 1,404,386 Contract assets 131,342 Prepaid expenses and other current assets 196,825 Property and equipment 906,006 Other assets 17,505 Total tangible assets 3,141,296 Intangible assets acquired: Tradename - trademarks 1,744,200 Intellectual property 1,137,000 Non-competes 124,900 Total intangible assets 3,006,100 Assumed liabilities: Accounts payable and accrued expenses 1,283,003 Deferred revenue 1,956,600 Line of credit 283,244 Loans payable 181,741 Loans payable - shareholder 543,581 Total assumed liabilities 4,248,169 Net assets acquired 1,899,227 Goodwill (a) $ 38,980,153 (a) Goodwill and intangibles are not deductible for tax purposes. |
Creatrix Inc Acquisition [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 3,630,000 Tangible assets acquired: Cash 3,572 Accounts receivable 125,908 Contract assets 33,965 Prepaid expenses and other current assets 3,597 Total tangible assets 167,042 Assumed liabilities: Accounts payable and accrued expenses 48,001 Loans payable 56,687 Total assumed liabilities 104,688 Net assets acquired 62,354 Goodwill (a) $ 3,567,646 (a) Goodwill is not deductible for tax purposes. |
CUATROi Acquisition [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 6,847,474 Tangible assets acquired: Cash 77,804 Accounts receivable 478,210 Prepaid expenses and other current assets 51,464 Property and equipment 434,816 Total tangible assets 1,042,294 Intangible assets acquired: Customer base 1,240,000 Total intangible assets 1,240,000 Assumed liabilities: Accounts payable and accrued expenses 242,830 Loans payable 850,199 Total assumed liabilities 1,093,029 Net assets acquired 1,189,265 Goodwill (a) $ 5,658,209 (a) Goodwill and intangibles are not deductible for tax purposes. |
NLT Secure Acquisition [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 6,919,597 Tangible assets acquired: Cash 48,858 Accounts receivable 66,972 Prepaid expenses and other current assets 154,300 Property and equipment 1,071,401 Total tangible assets 1,341,531 Assumed liabilities: Accounts payable and accrued expenses 791,228 Loans payable 1,778,591 Total assumed liabilities 2,569,819 Net liabilities assumed 1,228,288 Goodwill (a) $ 8,147,885 (a) Goodwill is not deductible for tax purposes. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets consisted of: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS December 31, 2023 December 31, 2022 Prepaid expenses $ 253,953 $ 987,651 Prepaid taxes 886,920 572,645 Prepaid insurance 59,398 164,354 Total prepaid expenses and other current assets $ 1,200,271 $ 1,724,650 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2023 December 31, 2022 Computer equipment $ 1,277,609 $ 1,264,713 Building 1,715,929 1,776,040 Leasehold improvements 527,705 541,647 Vehicle - 28,229 Furniture and fixtures 128,904 151,142 Software 1,728,126 1,667,283 Property and equipment gross 5,378,273 5,429,054 Less: accumulated depreciation (1,700,799 ) (748,559 ) Property and equipment, net $ 3,677,474 $ 4,680,495 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN GOODWILL | The following table summarizes the changes in goodwill during the years ended December 31, 2023 and 2022, respectively: SCHEDULE OF CHANGES IN GOODWILL Balance as of December 31, 2021 Goodwill $ 38,870,599 Accumulated impairment losses (22,078,064 ) 16,792,535 Goodwill acquired during year 58,190,213 Foreign currency translation adjustment 1,237,153 Other 444,116 Balance as of December 31, 2022 Goodwill $ 98,742,081 Accumulated impairment losses (22,078,064 ) 76,664,017 Foreign currency translation adjustment 50,544 Impairment losses (45,194,717 ) Balance as of December 31, 2023 Goodwill 98,792,625 Accumulated impairment losses (67,272,781 ) $ 31,519,844 |
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS | Intangible assets, net are summarized as follows: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames – trademarks $ 4,037,142 $ (2,329,498 ) $ 1,707,644 Customer base 1,145,378 (639,937 ) 505,441 Non-compete agreements 685,651 (630,595 ) 55,056 Intellectual property/technology 2,588,560 (1,078,457 ) 1,510,103 Intangible Asset $ 8,456,731 $ (4,678,487 ) $ 3,778,244 Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames – trademarks $ 4,744,409 $ (1,167,476 ) $ 3,576,933 Customer base 2,949,143 (449,565 ) 2,499,578 Non-compete agreements 796,583 (436,611 ) 359,972 Intellectual property/technology 2,659,391 (620,645 ) 2,038,746 Intangible Asset $ 11,149,526 $ (2,674,297 ) $ 8,475,229 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | Based on the balance of intangibles assets at December 31, 2023, expected future amortization expense is as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2024 $ 1,808,849 2025 983,019 2026 772,645 2027 115,331 2028 49,200 Thereafter 49,200 Future Amortization Expense $ 3,778,244 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consisted of the following amounts: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES December 31, 2023 December 31, 2022 Accounts payable $ 11,045,657 $ 5,267,492 Accrued payroll and bonuses 1,873,848 1,274,919 Accrued expenses 1,650,624 740,231 Accrued commissions 100,000 305,768 Indirect taxes payable 793,347 556,151 Accrued interest 487,851 165,776 Total accounts payable and accrued expenses $ 15,951,327 $ 8,310,337 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
SCHEDULE OF STOCK WARRANT ACTIVITY | The follow table summarizes warrant activity: SCHEDULE OF STOCK WARRANT ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 - $ - - $ - Granted 9,614 75.00 - - Exercised - - - - Expired or cancelled - - - - Outstanding at December 31, 2022 9,614 $ 75.00 4.01 $ - Exercisable at December 31, 2022 9,614 $ 75.00 4.01 $ - Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2023 9,614 $ 75.00 4.01 $ - Granted 40,000 3.75 5.00 - Exercised - - - - Expired or cancelled - - - - Outstanding at December 31, 2023 49,614 $ 17.56 4.12 $ - Exercisable at December 31, 2023 49,614 $ 17.56 4.12 $ - |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Compensation Related Costs [Abstract] | |
SCHEDULE OF BLACK-SCHOLES STOCK OPTIONS GRANTED | In applying the Black-Scholes option pricing model to stock options granted, we used the following assumptions: SCHEDULE OF BLACK-SCHOLES STOCK OPTIONS GRANTED For the Year Ended For the Year Ended December 31, 2023 December 31, 2022 Risk free interest rate 3.46 4.79 % 1.43 4.22 % Contractual term (years) 5.00 10.00 5.00 10.00 Expected volatility 94.58 136.47 % 87.11 90.90 % Expected dividend yield - % - % |
SCHEDULE OF STOCK OPTION ACTIVITY | The follow table summarizes stock option activity: SCHEDULE OF STOCK OPTION ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 2,205,824 $ 27.60 - $ - Granted 1,049,489 52.65 - - Exercised (179,268 ) 8.25 - - Expired or cancelled (649,617 ) 45.45 - - Outstanding at December 31, 2022 2,426,428 36.73 - - Granted 326,512 6.15 - - Exercised (69,378 ) 7.18 - - Expired or cancelled (578,394 ) 41.56 - - Outstanding at December 31, 2023 2,105,168 $ 31.63 4.40 $ 1,542 Exercisable at December 31, 2023 1,514,541 $ 28.53 3.18 $ - |
LOANS PAYABLE, CONVERTIBLE NO_2
LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LOAN PAYABLE | Loans payable was as follows: SCHEDULE OF LOAN PAYABLE Effective Interest Rate Maturities December 31, 2023 December 31, 2022 Term loans (US dollar denominated) 4.00 71.55 % 2023 2027 $ 1,899,035 $ 5,461,520 Term loans (Chilean peso denominated) 3.48 19.20 % 2023 2031 4,541,217 6,541,113 6,440,252 12,002,633 Less current portion (3,691,464 ) (7,758,831 ) Long term loans payable $ 2,748,788 $ 4,243,802 |
SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT | Future minimum payments under the above debt instruments following the year ended December 31, 2023, are as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT 2024 $ 5,867,234 2025 6,522,165 2026 535,515 2027 293,634 2028 246,145 Thereafter 344,110 Total future minimum payments 13,808,803 Less: discount (318,551 ) Total 13,490,252 Less: current (5,741,464 ) Long term debt, net $ 7,748,788 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION | The following table presents net lease cost and other supplemental lease information: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Year Ended Year Ended Lease cost Operating lease cost (cost resulting from lease payments) $ 270,638 $ 259,033 Short term lease cost 156,828 66,658 Net lease cost $ 427,466 $ 325,691 Operating lease – operating cash flows (fixed payments) $ 270,638 $ 259,003 Operating lease – operating cash flows (liability reduction) $ 199,069 $ 233,425 Non-current leases – right of use assets $ 762,228 $ 255,687 Current liabilities – operating lease liabilities $ 219,342 $ 121,731 Non-current liabilities – operating lease liabilities $ 596,307 $ 159,205 |
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES | Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the year ended December 31, 2023, are as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES Fiscal Year Operating Leases 2024 $ 293,689 2025 252,040 2026 198,690 2027 204,644 2028 53,816 Total future minimum lease payments 1,002,879 Amount representing interest (187,230 ) Present value of net future minimum lease payments $ 815,649 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX BENEFIT | For the years ended December 31, 2023, and 2022, the income tax benefit consisted of the following: SCHEDULE OF INCOME TAX BENEFIT 2023 2022 Year Ended December 31, 2023 2022 Current: Federal $ - $ - Foreign - 1,432 State - 6,869 Total current income taxes $ - $ 8,301 Deferred Federal $ - $ (95,018 ) Foreign (435,678 ) 100,466 State - (14,298 ) Total deferred income taxes $ (435,678 ) $ (8,850 ) Total $ (435,678 ) $ (549 ) |
SCHEDULE OF STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT | A reconciliation of the statutory federal income tax benefit to actual tax benefit for the years ended December 31, 2023 and 2022 is as follows: SCHEDULE OF STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT Year Ended December 31, 2023 2022 Computed tax benefit at statutory rate 21.00 % 21.00 % Stock-based compensation (3.28 )% (5.10 )% Change in valuation allowance (10.77 )% (9.12 )% Return to provision adjustments (6.81 )% (6.39 )% Other, net (0.14 )% (0.39 )% Effective tax rate 0.00 % 0.00 % |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows as of December 31, 2023 and 2022: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 Year Ended December 31, 2023 2022 Deferred tax assets: Property and equipment $ 213,643 $ 69,252 Allowance for doubtful accounts 53,700 143,804 Net operating loss carryforwards 9,696,873 1,452,734 Stock-based compensation 9,841,300 4,303,860 Accounts payable and accrued liabilities 307,842 3,191 Goodwill impairment 12,298,349 - Other 19,770 208,043 Total deferred tax assets $ 32,431,477 $ 6,180,884 Valuation allowance (31,988,729 ) (4,381,644 ) Net deferred income taxes $ 442,748 $ 1,799,240 Deferred tax liabilities Intangible assets $ (326,448 ) $ (2,041,418 ) Prepaid expenses (116,300 ) (193,500 ) Total deferred tax liabilities (442,748 ) (2,234,918 ) Net deferred tax liabilities $ - $ (435,678 ) Net deferred tax liability by jurisdiction Domestic $ - $ - Chile - (435,678 ) Peru - - Colombia - - Total $ - $ (435,678 ) |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS | Revenue by geography is based on the customer’s billing address and was as follows: SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS 2023 2022 U.S. $ 33,953,744 $ 36,559,841 Chile 22,570,883 9,634,082 All other countries 534,130 355,694 Revenue $ 57,058,757 $ 46,549,617 |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS | Property and equipment, net by geography was as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS 2023 2022 U.S. $ 1,052,637 $ 1,198,057 Chile 2,623,881 3,480,911 All other countries 956 1,527 Property and equipment net $ 3,677,474 $ 4,680,495 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME | The following table presents AOCI activity in equity: SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME Foreign Currency Translation Adjustments Total AOCI Balance as of December 31, 2021 $ - $ - Other comprehensive income 1,062,247 1,062,247 Amounts reclassified from AOCI - - Balance as of December 31, 2022 1,062,247 1,062,247 Other comprehensive income 257,930 257,930 Amounts reclassified from AOCI - - Balance as of December 31, 2023 $ 1,320,177 $ 1,320,177 |
SUMMARY OF SECURITIES EXCLUDED
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE (Details) - shares | 12 Months Ended | ||
Mar. 08, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Reverse stock split | 1-for-15 | ||
Antidilutive securities excluded from the diluted per share calculation | 3,000,904 | 2,464,757 | |
Share-Based Payment Arrangement, Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from the diluted per share calculation | 2,105,168 | 2,426,428 | |
Warrant [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from the diluted per share calculation | 49,614 | 9,614 | |
Convertible Debt [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from the diluted per share calculation | 846,122 | 28,715 |
SCHEDULE OF DEFERRED REVENUE (D
SCHEDULE OF DEFERRED REVENUE (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current: | ||
Total deferred revenue - current | $ 4,158,969 | $ 4,472,140 |
Long-term: | ||
Total deferred revenue – long term | 1,099,734 | |
Security managed services [Member] | ||
Current: | ||
Total deferred revenue - current | 3,366,273 | 3,609,087 |
Long-term: | ||
Total deferred revenue – long term | 1,099,734 | |
Professional Services [Member] | ||
Current: | ||
Total deferred revenue - current | $ 792,696 | $ 863,053 |
SCHEDULE OF PERFORMANCE OBLIGAT
SCHEDULE OF PERFORMANCE OBLIGATIONS EXPECTED TO RECOGNIZED REVENUE (Details) | Dec. 31, 2023 USD ($) |
Product Information [Line Items] | |
Total deferred revenue | $ 5,258,703 |
Security managed services [Member] | |
Product Information [Line Items] | |
Total deferred revenue | 4,466,007 |
Professional Services [Member] | |
Product Information [Line Items] | |
Total deferred revenue | 792,696 |
2024 [Member] | |
Product Information [Line Items] | |
Total deferred revenue | 4,158,969 |
2024 [Member] | Security managed services [Member] | |
Product Information [Line Items] | |
Total deferred revenue | 3,366,273 |
2024 [Member] | Professional Services [Member] | |
Product Information [Line Items] | |
Total deferred revenue | 792,696 |
2025 [Member] | |
Product Information [Line Items] | |
Total deferred revenue | 1,099,734 |
2025 [Member] | Security managed services [Member] | |
Product Information [Line Items] | |
Total deferred revenue | 1,099,734 |
2025 [Member] | Professional Services [Member] | |
Product Information [Line Items] | |
Total deferred revenue |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||||
Mar. 08, 2024 | Feb. 29, 2024 | Feb. 29, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Reverse stock split | 1-for-15 | ||||
Common stock, par value | $ 0.00001 | $ 0.00001 | |||
Common stock, shares issued | 11,949,959 | 9,697,921 | |||
Allowances for doubtful accounts | $ 219,141 | $ 270,011 | |||
Impairment of goodwill | 45,194,717 | ||||
Impairment of intangible assets | 3,116,039 | ||||
Marketing and advertising expense | 474,121 | $ 804,218 | |||
Deferred revenue recognized | $ 4,120,260 | ||||
Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, estimated useful life | 3 years | ||||
Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, estimated useful life | 5 years | ||||
Subsequent Event [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Reverse stock split | 1-for-15 reverse stock | 1-for-15 reverse stock split | |||
Reverse stock split shares | 1 | ||||
Common stock, par value | $ 0.00001 | $ 0.00001 | |||
Common stock, shares issued | 15 | 15 |
SUMMARY OF SIGNIFICANT FAIR VAL
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES (Details) - USD ($) | Sep. 01, 2022 | Aug. 25, 2022 | Jun. 02, 2022 | Jan. 05, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||
Goodwill (a) | $ 31,519,844 | $ 76,664,017 | $ 16,792,535 | |||||
True Digital Security, Inc. Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration paid | $ 40,879,380 | |||||||
Cash | 485,232 | |||||||
Accounts receivable | 1,404,386 | |||||||
Contract assets | 131,342 | |||||||
Prepaid expenses and other current assets | 196,825 | |||||||
Property and equipment | 906,006 | |||||||
Other assets | 17,505 | |||||||
Total tangible assets | 3,141,296 | |||||||
Accounts payable and accrued expenses | 1,283,003 | |||||||
Deferred revenue | 1,956,600 | |||||||
Line of credit | 283,244 | |||||||
Loans payable | 181,741 | |||||||
Loans payable - shareholder | 543,581 | |||||||
Total assumed liabilities | 4,248,169 | |||||||
Net assets acquired | 1,899,227 | |||||||
Goodwill (a) | [1] | 38,980,153 | ||||||
Net liabilities assumed | 1,899,227 | |||||||
Techville [Member] | Trade Names [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Customer base | 1,744,200 | |||||||
True Digital Security Inc [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Customer base | 3,006,100 | |||||||
True Digital Security Inc [Member] | Intellectual Property Technology [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Customer base | 1,137,000 | |||||||
True Digital Security Inc [Member] | Noncompete Agreements [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Customer base | $ 124,900 | |||||||
Creatrix Inc Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration paid | $ 3,630,000 | |||||||
Cash | 3,572 | |||||||
Accounts receivable | 125,908 | |||||||
Contract assets | 33,965 | |||||||
Prepaid expenses and other current assets | 3,597 | |||||||
Total tangible assets | 167,042 | |||||||
Accounts payable and accrued expenses | 48,001 | |||||||
Loans payable | 56,687 | |||||||
Total assumed liabilities | 104,688 | |||||||
Net assets acquired | 62,354 | |||||||
Goodwill (a) | [2] | 3,567,646 | ||||||
Net liabilities assumed | $ 62,354 | |||||||
CUATROi Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration paid | $ 6,847,474 | |||||||
Cash | 77,804 | |||||||
Accounts receivable | 478,210 | |||||||
Prepaid expenses and other current assets | 51,464 | |||||||
Property and equipment | 434,816 | |||||||
Total tangible assets | 1,042,294 | |||||||
Accounts payable and accrued expenses | 242,830 | |||||||
Loans payable | 850,199 | |||||||
Total assumed liabilities | 1,093,029 | |||||||
Net assets acquired | 1,189,265 | |||||||
Goodwill (a) | [3] | 5,658,209 | ||||||
Total intangible assets | 1,240,000 | |||||||
Net liabilities assumed | 1,189,265 | |||||||
CUATROi Acquisition [Member] | Customer Base [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Customer base | $ 1,240,000 | |||||||
NLT Secure Acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration paid | $ 6,919,597 | |||||||
Cash | 48,858 | |||||||
Accounts receivable | 66,972 | |||||||
Prepaid expenses and other current assets | 154,300 | |||||||
Property and equipment | 1,071,401 | |||||||
Total tangible assets | 1,341,531 | |||||||
Accounts payable and accrued expenses | 791,228 | |||||||
Loans payable | 1,778,591 | |||||||
Total assumed liabilities | 2,569,819 | |||||||
Net assets acquired | 1,228,288 | |||||||
Goodwill (a) | [4] | 8,147,885 | ||||||
Net liabilities assumed | $ 1,228,288 | |||||||
[1]Goodwill and intangibles are not deductible for tax purposes.[2]Goodwill is not deductible for tax purposes.[3]Goodwill and intangibles are not deductible for tax purposes.[4]Goodwill is not deductible for tax purposes. |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 19, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Aggregate acquisition of value | $ 99,000 | $ 34,726,380 | |
Liabilities assumed, assets | $ 1,836,320 | ||
True Digital Security, Inc. Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Aggregate acquisition of value | $ 6,153,000 | ||
Aggregate acquisition of shares | 548,600 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 253,953 | $ 987,651 |
Prepaid taxes | 886,920 | 572,645 |
Prepaid insurance | 59,398 | 164,354 |
Total prepaid expenses and other current assets | $ 1,200,271 | $ 1,724,650 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 5,378,273 | $ 5,429,054 |
Less: accumulated depreciation | (1,700,799) | (748,559) |
Property and equipment, net | 3,677,474 | 4,680,495 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,277,609 | 1,264,713 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,715,929 | 1,776,040 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 527,705 | 541,647 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 28,229 | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 128,904 | 151,142 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,728,126 | $ 1,667,283 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,099,048 | $ 736,181 |
SCHEDULE OF CHANGES IN GOODWILL
SCHEDULE OF CHANGES IN GOODWILL (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 98,792,625 | $ 98,742,081 | $ 38,870,599 |
Accumulated impairment losses | (67,272,781) | (22,078,064) | (22,078,064) |
Goodwill | 31,519,844 | 76,664,017 | $ 16,792,535 |
Acquisition of goodwill | 58,190,213 | ||
Foreign currency translation adjustment | 50,544 | 1,237,153 | |
Other | 444,116 | ||
Impairment | $ (45,194,717) |
SUMMARY OF IDENTIFIABLE INTANGI
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 8,456,731 | $ 11,149,526 |
Finite-Lived Intangible Assets, Accumulated Amortization | (4,678,487) | (2,674,297) |
Finite-Lived Intangible Assets, Net | 3,778,244 | 8,475,229 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 4,037,142 | 4,744,409 |
Finite-Lived Intangible Assets, Accumulated Amortization | (2,329,498) | (1,167,476) |
Finite-Lived Intangible Assets, Net | 1,707,644 | 3,576,933 |
Customer Base [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,145,378 | 2,949,143 |
Finite-Lived Intangible Assets, Accumulated Amortization | (639,937) | (449,565) |
Finite-Lived Intangible Assets, Net | 505,441 | 2,499,578 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 685,651 | 796,583 |
Finite-Lived Intangible Assets, Accumulated Amortization | (630,595) | (436,611) |
Finite-Lived Intangible Assets, Net | 55,056 | 359,972 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 2,588,560 | 2,659,391 |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,078,457) | (620,645) |
Finite-Lived Intangible Assets, Net | $ 1,510,103 | $ 2,038,746 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 1,808,849 | |
2025 | 983,019 | |
2026 | 772,645 | |
2027 | 115,331 | |
2028 | 49,200 | |
Thereafter | 49,200 | |
Future Amortization Expense | $ 3,778,244 | $ 8,475,229 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Impairment charge of goodwill | $ 45,194,717 | |
Impairment of intangible assets | 3,116,039 | |
Iintangible assets | 455,809 | |
Amortization of identifiable intangible assets | $ 2,044,999 | $ 2,338,273 |
Weighted average remaining useful life | 2 years 8 months 12 days | |
UNITED STATES | ||
Impairment charge of goodwill | $ 35,933,364 | |
Latin America [Member] | ||
Impairment charge of goodwill | $ 9,261,353 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 11,045,657 | $ 5,267,492 |
Accrued payroll and bonuses | 1,873,848 | 1,274,919 |
Accrued expenses | 1,650,624 | 740,231 |
Accrued commissions | 100,000 | 305,768 |
Indirect taxes payable | 793,347 | 556,151 |
Accrued interest | 487,851 | 165,776 |
Total accounts payable and accrued expenses | $ 15,951,327 | $ 8,310,337 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Aug. 31, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Consulting fees | $ 3,695,187 | $ 2,067,603 | |||
Interest expense | 2,881,416 | 680,921 | |||
Unsecured Debt [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument face amount | $ 5,000,000 | ||||
Debt instrument interest rate | 10% | ||||
Maturity date | Mar. 20, 2025 | ||||
Conversion price | $ 18 | ||||
Interest expense | 388,888 | ||||
Accrued interest | 388,888 | ||||
Unsecured Debt [Member] | Prereverse Split Basis [Member] | |||||
Related Party Transaction [Line Items] | |||||
Conversion price | $ 1.20 | ||||
Independent Consulting Agreement [Member] | Stephen Scott [Member] | |||||
Related Party Transaction [Line Items] | |||||
Consulting fees | $ 15,000 | $ 11,500 | 159,000 | 138,000 | |
One Year Managed Services Agreement [Member] | Hensley Beverage Company [Member] | Related Party [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenues | 1,417,398 | 850,445 | |||
Outstanding receivable related parties | $ 152,213 | $ 15,737 |
SCHEDULE OF STOCK WARRANT ACTIV
SCHEDULE OF STOCK WARRANT ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Weighted Average Remaining Contractual Life, Beginning | 4 years 3 days | |
Weighted Average Remaining Contractual Life, Granted | 5 years | |
Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Number of warrants outstanding, beginning balance | 9,614 | |
Weighted average exercise price, outstanding beginning balance | $ 75 | |
Aggregate intrinsic value outstanding, beginning | ||
Number of warrants, granted | 40,000 | 9,614 |
Weighted average exercise price, granted | $ 3.75 | $ 75 |
Number of warrants, exercised | ||
Weighted average exercise price, exercised | ||
Number of warrants, expired or cancelled | ||
Weighted average exercise price, expired or cancelled | ||
Number of warrants outstanding, ending balance | 49,614 | 9,614 |
Weighted average exercise price, outstanding ending balance | $ 17.56 | $ 75 |
Weighted average remaining contractual life, outstanding ending | 4 years 1 month 13 days | 4 years 3 days |
Aggregate intrinsic value outstanding, ending | ||
Number of warrants exercisable, ending balance | 49,614 | 9,614 |
Weighted average exercise price, exercisable ending | $ 17.56 | $ 75 |
Weighted average remaining contractual life, exercisable ending | 4 years 1 month 13 days | 4 years 3 days |
Aggregate intrinsic value exercisable, ending |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 18, 2022 | May 19, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | ||
Common stock, par value | $ 0.00001 | $ 0.00001 | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | ||
Proceeds from sale of common stock | $ 6,655,493 | $ 10,689,087 | ||
Direct offering Cost | $ 6,655,493 | $ 1,167,289 | ||
Placement Agent Warrant [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Direct offering shares | 1,333,334 | |||
Direct offering Cost | $ 4,000,000 | |||
Consultants [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Direct offering shares | 366,667 | 60,655 | ||
Prereverse Split Basis [Member] | Placement Agent Warrant [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Direct offering shares | 20,000,000 | |||
Warrant exercise price | $ 0.25 | |||
Warrants to purchase common stock | 600,000 | |||
Prereverse Split Basis [Member] | Consultants [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Direct offering shares | 5,500,000 | 909,819 | ||
Placement Agent Warrant [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrant exercise price | $ 3.75 | |||
Warrants to purchase common stock | 40,000 | |||
Net proceeds | $ 2,000,000 | |||
Warrant expires | May 16, 2028 | |||
Investors [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Direct offering shares | 1,782,658 | 160,833 | ||
Proceeds from sale of common stock | $ 6,682,198 | $ 10,689,087 | ||
Investors [Member] | Prereverse Split Basis [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Direct offering shares | 26,739,853 | 2,412,474 | ||
Underwriter [Member] | IPO [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants granted | 9,614 | |||
Warrant term | 5 years | |||
Warrant exercise price | $ 75 | |||
Underwriter [Member] | Prereverse Split Basis [Member] | IPO [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants granted | 144,200 | |||
Warrant exercise price | $ 5 |
SCHEDULE OF BLACK-SCHOLES STOCK
SCHEDULE OF BLACK-SCHOLES STOCK OPTIONS GRANTED (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Risk free interest rate, minimum | 3.46% | 1.43% |
Risk free interest rate, maximum | 4.79% | 4.22% |
Expected volatility, minimum | 94.58% | 87.11% |
Expected volatility, maximum | 136.47% | 90.90% |
Expected dividend yield | ||
Minimum [Member] | ||
Contractual term (years) | 5 years | 5 years |
Maximum [Member] | ||
Contractual term (years) | 10 years | 10 years |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | ||
Shares, Outstanding beginning | 2,426,428 | 2,205,824 |
Weighted Average Exercise Price Outstanding, beginning | $ 36.73 | $ 27.60 |
Shares, Granted | 326,512 | 1,049,489 |
Weighted Average Exercise Price, Granted | $ 6.15 | $ 52.65 |
Shares, Exercised | (69,378) | (179,268) |
Weighted Average Exercise Price, Exercised | $ 7.18 | $ 8.25 |
Shares, Expired or cancelled | (578,394) | (649,617) |
Weighted Average Exercise Price, Expired or cancelled | $ 41.56 | $ 45.45 |
Shares, Outstanding beginning | 2,105,168 | 2,426,428 |
Weighted Average Exercise Price Outstanding, beginning | $ 31.63 | $ 36.73 |
Weighted average remaining contractual life Outstanding, ending | 4 years 4 months 24 days | |
Aggregate intrinsic value outstanding ending | $ 1,542 | |
Exercisable ending balance, shares | 1,514,541 | |
weighted average exercise price, exercisable ending | $ 28.53 | |
Weighted average remaining contractual life, exercisable ending | 3 years 2 months 4 days | |
Aggregate intrinsic value exercisable ending |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 13, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Number of stock options granted | 326,512 | 1,049,489 | |
Stock based compensation | $ 11,469,667 | $ 15,464,587 | |
Unrecognized stock-based compensation expense | $ 16,337,762 | ||
Unrecognized stock-based compensation expense, recognition period | 1 year 10 months 6 days | ||
Weighted average grant date fair value | $ 2.57 | $ 38.82 | |
Intrinsic value of options exercised | $ 887,595 | $ 7,164,856 | |
Options vested net of forfeitures | 317,929 | ||
2019 Equity Incentive Plan [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Number of stock options granted | 326,512 | 1,049,489 | |
Prereverse Split Basis [Member] | 2019 Equity Incentive Plan [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Number of stock options granted | 4,900,833 | 17,457,613 | |
2023 Equity Incentive Plan [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Common stock resserved for issuance | 2,666,667 | ||
2023 Equity Incentive Plan [Member] | Prereverse Split Basis [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Common stock resserved for issuance | 40,000,000 | ||
2019 Equity Incentive Plan [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Common stock resserved for issuance | 1,455,983 | 4,122,650 | |
2019 Equity Incentive Plan [Member] | Prereverse Split Basis [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Common stock resserved for issuance | 21,839,752 | 61,839,752 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Description for voting securities | beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us | |
Indirect tax liabilities | $ 793,347 | $ 409,187 |
SCHEDULE OF LOAN PAYABLE (Detai
SCHEDULE OF LOAN PAYABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Short-Term Debt [Line Items] | ||
Loans payable | $ 6,440,252 | $ 12,002,633 |
Less current portion | (3,691,464) | (7,758,831) |
Long term loans payable | 2,748,788 | 4,243,802 |
Term Loans One [Member] | ||
Short-Term Debt [Line Items] | ||
Loans payable | $ 1,899,035 | 5,461,520 |
Term Loans One [Member] | Minimum [Member] | ||
Short-Term Debt [Line Items] | ||
Line of credit facility interest rate percentage | 4% | |
Line of credit maturity description | 2023 | |
Term Loans One [Member] | Maximum [Member] | ||
Short-Term Debt [Line Items] | ||
Line of credit facility interest rate percentage | 71.55% | |
Line of credit maturity description | 2027 | |
Term Loans Two [Member] | ||
Short-Term Debt [Line Items] | ||
Loans payable | $ 4,541,217 | $ 6,541,113 |
Term Loans Two [Member] | Minimum [Member] | ||
Short-Term Debt [Line Items] | ||
Line of credit facility interest rate percentage | 3.48% | |
Line of credit maturity description | 2023 | |
Term Loans Two [Member] | Maximum [Member] | ||
Short-Term Debt [Line Items] | ||
Line of credit facility interest rate percentage | 19.20% | |
Line of credit maturity description | 2031 |
SCHEDULE OF FUTURE MINIMUM PAYM
SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT (Details) | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 5,867,234 |
2025 | 6,522,165 |
2026 | 535,515 |
2027 | 293,634 |
2028 | 246,145 |
Thereafter | 344,110 |
Total future minimum payments | 13,808,803 |
Less: discount | (318,551) |
Total | 13,490,252 |
Less: current | (5,741,464) |
Long term debt, net | $ 7,748,788 |
LOANS PAYABLE, CONVERTIBLE NO_3
LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||||
Nov. 30, 2023 | May 31, 2023 | Apr. 28, 2023 | Mar. 31, 2023 | Mar. 10, 2022 | Oct. 31, 2023 | Aug. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Oct. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||||||||||
Interest expense | $ 2,881,416 | $ 680,921 | |||||||||||
Proceeds from convertable debt | 2,050,000 | 1,000,000 | |||||||||||
Convertible Notes Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expense | 26,983 | ||||||||||||
Accrued interest | $ 26,983 | ||||||||||||
Common Stock [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
New shares issues | 133,334 | ||||||||||||
Prereverse Split Basis [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
New shares issues | 2,000,000 | ||||||||||||
Loan And Security Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 2,200,000 | ||||||||||||
Interest expense | $ 200,881 | ||||||||||||
Accrued interest | 594,000 | ||||||||||||
Periodic payment | 53,731 | ||||||||||||
Debt instrumental Fee amount | $ 44,000 | ||||||||||||
Debt Long term bearing variable interest | 53.44% | ||||||||||||
Cash Advance Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expense | 978,833 | ||||||||||||
Proceeds from convertable debt | $ 2,000,000 | ||||||||||||
Upfront fees | 87,500 | ||||||||||||
Periodic payment | 99,398 | ||||||||||||
Repayments for debt | $ 2,870,000 | ||||||||||||
Second Cash Advance Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expense | 468,707 | ||||||||||||
Proceeds from convertable debt | $ 2,000,000 | ||||||||||||
Upfront fees | 50,000 | ||||||||||||
Periodic payment | 80,588 | ||||||||||||
Repayments for debt | $ 2,740,000 | ||||||||||||
Term Loans One [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expense | 20,605 | 50,754 | |||||||||||
Accrued interest | $ 0 | 13,435 | |||||||||||
Aggregate effective interest rate | 8.61% | ||||||||||||
Term Loans Two [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expense | $ 617,804 | 318,055 | |||||||||||
Aggregate effective interest rate | 11.15% | ||||||||||||
Convertible Note Payable [Member] | Neil Stinchcombe [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 1,500,000 | ||||||||||||
Debt instrument interest rate stated percentage | 5% | 5% | |||||||||||
Maturity date | Oct. 27, 2022 | Jan. 27, 2022 | |||||||||||
Interest expense | $ 16,970 | 106,507 | |||||||||||
Debt instrument Conversion price | $ 75 | ||||||||||||
Convertible Note Payable [Member] | Mr Mc Cain [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Accrued interest | 388,888 | ||||||||||||
Convertible Note Payable [Member] | Installment Three [Member] | Neil Stinchcombe [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Periodic payment | $ 500,000 | $ 500,000 | $ 500,000 | ||||||||||
Prereverse Split Basis [Member] | Convertible Notes Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument Conversion price | $ 1.20 | $ 0.1173 | $ 1.20 | $ 7.83 | |||||||||
Prereverse Split Basis [Member] | Neil Stinchcombe [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument Conversion price | $ 5 | ||||||||||||
Unsecured Debt [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expense | 22,101 | 79,167 | |||||||||||
Accrued interest | 61,954 | ||||||||||||
Unsecured Debt [Member] | Convertible Notes Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 5,000,000 | $ 1,000,000 | $ 1,050,000 | $ 5,000,000 | $ 1,000,000 | 1,050,000 | |||||||
Debt instrument interest rate stated percentage | 10% | 12% | 10% | 10% | 5% | ||||||||
Maturity date | Oct. 12, 2024 | Jun. 07, 2024 | Mar. 20, 2025 | ||||||||||
Interest expense | 61,954 | ||||||||||||
Debt instrument Conversion price | $ 18 | $ 1.7595 | $ 18 | $ 117.45 | |||||||||
Debt instrument redemption, description | The outstanding principal of this note can be redeemed at any time by us or at maturity at 105% | ||||||||||||
Unsecured Debt [Member] | VCISO LLC [Member] | Convertible Notes Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument interest rate stated percentage | 4.20% | ||||||||||||
Unsecured Debt [Member] | Mr Mc Cain [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest expense | 388,888 | ||||||||||||
Bridge Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 5,000,000 | ||||||||||||
Debt instrument interest rate stated percentage | 4% | ||||||||||||
Maturity date | Dec. 14, 2022 | ||||||||||||
Interest expense | $ 116,667 | 114,167 | |||||||||||
Accrued interest | $ 0 | $ 4,167 | |||||||||||
Bridge Loan [Member] | Minimum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument interest rate stated percentage | 4% | ||||||||||||
Bridge Loan [Member] | Maximum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument interest rate stated percentage | 7.50% |
SCHEDULE OF LEASE COST AND OTHE
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases | ||
Operating lease cost (cost resulting from lease payments) | $ 270,638 | $ 259,033 |
Short term lease cost | 156,828 | 66,658 |
Net lease cost | 427,466 | 325,691 |
Operating lease – operating cash flows (fixed payments) | 270,638 | 259,003 |
Operating lease – operating cash flows (liability reduction) | 199,069 | 233,425 |
Non-current leases – right of use assets | 762,228 | 255,687 |
Current liabilities – operating lease liabilities | 219,342 | 121,731 |
Non-current liabilities – operating lease liabilities | $ 596,307 | $ 159,205 |
SCHEDULE OF FUTURE MINIMUM UNDE
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES (Details) | Dec. 31, 2023 USD ($) |
Leases | |
2024 | $ 293,689 |
2025 | 252,040 |
2026 | 198,690 |
2027 | 204,644 |
2028 | 53,816 |
Total future minimum lease payments | 1,002,879 |
Amount representing interest | (187,230) |
Present value of net future minimum lease payments | $ 815,649 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Operating lease liability current | $ 596,307 | $ 159,205 |
Weighted average incremental borrowing rate | 9.99% | |
Operating lease, weighted average remaining lease term | 3 years 9 months 3 days | |
Offsetting ROU [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Operating lease liability current | $ 733,782 | $ 476,986 |
SCHEDULE OF INCOME TAX BENEFIT
SCHEDULE OF INCOME TAX BENEFIT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal | ||
Foreign | 1,432 | |
State | 6,869 | |
Total current income taxes | 8,301 | |
Federal | (95,018) | |
Foreign | (435,678) | 100,466 |
State | (14,298) | |
Total deferred income taxes | (435,678) | (8,850) |
Total | $ (435,678) | $ (549) |
SCHEDULE OF STATUTORY FEDERAL I
SCHEDULE OF STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Computed tax benefit at statutory rate | 21% | 21% |
Stock-based compensation | (3.28%) | (5.10%) |
Change in valuation allowance | (10.77%) | (9.12%) |
Return to provision adjustments | (6.81%) | (6.39%) |
Other, net | (0.14%) | (0.39%) |
Effective tax rate | 0% | 0% |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property and equipment | $ 213,643 | $ 69,252 |
Allowance for doubtful accounts | 53,700 | 143,804 |
Net operating loss carryforwards | 9,696,873 | 1,452,734 |
Stock-based compensation | 9,841,300 | 4,303,860 |
Accounts payable and accrued liabilities | 307,842 | 3,191 |
Goodwill impairment | 12,298,349 | |
Other | 19,770 | 208,043 |
Total deferred tax assets | 32,431,477 | 6,180,884 |
Valuation allowance | (31,988,729) | (4,381,644) |
Net deferred income taxes | 442,748 | 1,799,240 |
Intangible assets | (326,448) | (2,041,418) |
Prepaid expenses | (116,300) | (193,500) |
Total deferred tax liabilities | (442,748) | (2,234,918) |
Total | (435,678) | |
Domestic [Member] | ||
Total | ||
CHILE | ||
Net operating loss carryforwards | 3,579,475 | |
Total | (435,678) | |
PERU | ||
Total | ||
COLOMBIA | ||
Total |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Valuation allowance increased | $ 27,607,085 | $ 4,555,842 |
Net operating loss carryforwards, federal | 34,870,734 | |
Deferred tax assets operating loss carryforwards state and local | 39,385,617 | |
Net operating loss carryforwards | 9,696,873 | $ 1,452,734 |
CHILE | ||
Net operating loss carryforwards | $ 3,579,475 |
DEFINED CONTRIBUTION PLAN (Deta
DEFINED CONTRIBUTION PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2023 | |
Retirement Benefits [Abstract] | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 80% | |
Defined contribution plan expense | $ 637,365 |
CONCENTRATION OF CREDIT RISK _2
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS (Details Narrative) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | No Single Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | 10% |
SCHEDULE OF REVENUE BY GEOGRAPH
SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 57,058,757 | $ 46,549,617 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 33,953,744 | 36,559,841 |
CHILE | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 22,570,883 | 9,634,082 |
All Other Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 534,130 | $ 355,694 |
SCHEDULE OF PROPERTY AND EQUI_2
SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | $ 3,677,474 | $ 4,680,495 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | 1,052,637 | 1,198,057 |
CHILE | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | 2,623,881 | 3,480,911 |
All Other Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | $ 956 | $ 1,527 |
SCHEDULE OF ACCUMULATED OTHER C
SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Balance as of December 31, 2022 | $ 1,062,247 | |
Other comprehensive income | 257,930 | 1,062,247 |
Amounts reclassified from AOCI | ||
Balance as of December 31, 2023 | 1,320,177 | 1,062,247 |
Foreign Currency Gain (Loss) [Member] | ||
Balance as of December 31, 2022 | 1,062,247 | |
Other comprehensive income | 257,930 | 1,062,247 |
Amounts reclassified from AOCI | ||
Balance as of December 31, 2023 | $ 1,320,177 | $ 1,062,247 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Apr. 05, 2024 | Mar. 28, 2024 | Mar. 22, 2024 | Mar. 08, 2024 | Feb. 29, 2024 | Feb. 29, 2024 | Jan. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | |||||||||
Reverse stock split | 1-for-15 | ||||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | |||||||
Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Reverse stock split | 1-for-15 reverse stock | 1-for-15 reverse stock split | |||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | |||||||
Share price | 100% | ||||||||
Subsequent Event [Member] | Business Loan And Security Agreement [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Loan principal amount | $ 2,200,000 | ||||||||
Origination fee paid | $ 44,000 | ||||||||
Loan bears interest rate | 51.73% | ||||||||
Loan periodic payment | $ 53,308 | ||||||||
Loan interest payable | $ 572,000 | ||||||||
Loan interest amount description | If the Loan is prepaid in full prior to the 60-day anniversary of the date of the Loan Agreement, the total interest is reduced as follows: (i) if the Loan is repaid within 30 days, the total amount of interest due will be $242,000, and (ii) if the Loan is repaid within 60 days, the total amount of interest due will be $286,000. | ||||||||
Subsequent Event [Member] | Fee Agreement [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares of common stock issued | 100,000 | ||||||||
Shares conversion per share | $ 0.00001 | ||||||||
Loan repayment description | Pursuant to the Fee Agreement, if we repay the Loan in full by (i) May 1, 2024, the Lender will return 75% of the Shares to us, and (ii) June 1, 2024, the Lender will return 50% of the Shares to us. | ||||||||
Subsequent Event [Member] | Aion Financial Technologies Inc [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrumental Collateral amount | $ 3,500,000 | ||||||||
Debt bear interest rate | 19.25% | ||||||||
Debt Instrument Fee | 35,000 | ||||||||
Debt bear interest rate | 29.25% |